BFC Newbies Thread: 33% of the interest paid is tax delectable

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moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Newbie Personal Finance Thread

Hi, this is a thread for any newbie questions having to deal with personal finance in general. It has links to all of the most common megathreads, answers to all of the most frequently asked questions, and quotes from posters in here who are much smarter than me. If you have any questions about personal finance in general ("What is a CD?", "How can I best pay my car loan off?", "Should I buy six eggs for $2 or three dozen for $9?"), feel free to post them here. If you feel as though your situation is particularly unique or if it will take you a million pages to take BFC's sage advice, go ahead and start your own thread.

These are the things that we'll usually need in order to give you good advice:

- A list of all your debts and assets ("I owe $5k in student loans and have $2k in my savings account").
- If you're asking how to best pay off your debt, we'll also need to know interest rates and balances on each debt you have ("Kohls credit card, Balance: $3720, Rate: 7.85%")
- Your budget, including income and expenses.
- Your goals. If you say "I make $5k a month and want to start investing!", well, we're gonna need to know what you're investing for. Retirement? A house? Future college fund? If you're not sure, we'll help figure it out with you.

Selected Megathread Links

FAQ

How should I pay off my debt or get started saving?
Getting Rid of Debt
There are many methods of getting rid of debt but two which are most often recommended:

- Pay off your highest interest rates first
- Pay off your smallest balances first

The mathematically optimal method is to pay off your highest interest debt first, then the next highest, etc. Doing this saves you the most money in interest payments. If you're disciplined enough, this method is the best. However, some people prefer to pay off their smallest debts first for the psychological value:

traveling midget posted:

The Debt Snowball

The principle is to stop everything except minimum payments and focus on one thing at a time. Otherwise, nothing gets accomplished because all your effort is diluted. First accumulate $1,000 cash as an emergency fund. Then begin intensely getting rid of all debt (except the house) using the debt snowball plan. List your debts in order with the smallest payoff or balance first. Do not be concerned with interest rates or terms unless two debts have similar payoffs, then list the higher interest rate debt first. Paying the little debts off first gives you quick feedback, and you are more likely to stay with the plan.

This will result in you paying more money to service your debt over the long run, but psychologically getting rid of the small balances serves as a motivator. Whether you need that or not is up to you. The same principle applies to cutting down on spending. Some people are able to just put away their credit cards, some people need to cut them up into little bitty pieces to stop using them, some people put them in a cup of water and freeze them in the freezer so they only use them in case of emergencies. How much self control do you have? This will determine which path is best for you to stop spending and get out of debt.

EvilSpongeBob posted:

Most people would agree that you should start saving for the future now. Today. I recommend that you do the following in the order that they appear.

1 - Start an emergency savings account of 3-9 months of expenses. Three months if you live at home with your parents and really don't have expenses. Nine months if you have a family and are the only source of income. I recommend placing this money in an online savings account or a money market fund.

2 - Does your company offer matching contributions on your 401k/403b retirement plans? If you are not contributing enough to take advantage of your employer's free money, then you are literally throwing money away. For example, my employer, the US Government, automatically puts in 1% and matches up to 5% into my 401k. So I would need to contribute 5% of my pay to take advantage of the free money.

3 - Pay off those high APR debts NOW. I cannot emphasize this enough. Your credit cards and auto loans are a guaranteed loss of 10% or more a year. No investment that anyone can recommend in this forum will give you a guaranteed return more than 10% per year. Credit cards are a necessary evil (so you can eventually buy a house later in life), but carrying debt on them will eat you up and poo poo you out.

Where should I keep my savings?
There is usually a tradeoff between liquidity and higher rates. Checking accounts almost never are good places to store your money. Other options include:
Savings accounts (you can usually get a better rate with an online bank) - easily accessible, though some places may require a minimum deposit
Money Market Accounts - a type of savings account that usually requires a higher deposit but has higher rates
CDs - these are (usually) fixed-term holdings that have higher rates than savings accounts. The downside is that you sign up to keep your money there for a specific length of time and if you want to withdraw your money early, you'll pay a penalty.
Bonds, T-Bills, HSAs, etc - there are a million different kinds of places to put your money. If you want more information, poke around investopedia.

How can I improve my credit score? Should I keep a balance? What should my utilization to credit ratio be?

Fraternite posted:

Honestly, don't worry about your credit score and just make good financial choices -- your credit score will take care of itself.

Never keep a balance you don't absolutely have to unless it's a rare exception (0% APR for a short term).

skipdogg posted:

The utilization factory doesn't have a history. If one month you're at 80% utilization, and next month your down to 10, your score can and will change dramatically. It's not like making a late payment where the effects gradually go away over time, it's pretty much instant.

You could have 80% utilization on all your credit cards and a 670 credit score, you know your going to buy a house in the next 3 months so you pay everything off, and your score will probably jump into the 720 range or better lowering your mortgage interest rate and saving you money over the long run.

If somebody calls my previous employer as a reference, it's illegal for them to say bad poo poo about me, right?
Wrong. This is a common misconception, though, because so many companies won't say anything bad about you. However, it's not illegal:

evensevenone posted:

You're confusing the typical policy with the law. A former employer can say anything they want, but if they lie, they could be sued for defamation. Therefore it's best to say nothing but the dates that someone worked there, because that's the only thing that you can prove without a doubt.

I'm in Canadaland, where money is made out of maple leaves. What do I do?

Please ask simple questions here, and visit the Canadian Investing thread for more detailed discussion.

What about Australia?

Check this government link out: Moneysmart or ask your question here.

And the UK?

Got you Brits covered here.

What should I read to learn more?

Unormal posted:

Here's some reading recommendations:

Fundamentals

If You Can - a great summary of what you should know as a young investor, by Bernstein:
http://www.etf.com/docs/IfYouCan.pdf
The Four Pillars of Investing
http://www.amazon.com/Four-Pillars-Investing-Building-Portfolio/dp/0071385290

Deeper Cuts

Intelligent Investor
http://www.amazon.com/Intelligent-Investor-Book-Practical-Counsel/dp/B0002X1JKU/ref=pd_sim_b_39
A Random Walk Down Wall Street
http://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393325350/ref=pd_sim_b_23

Economic Interest

Devil Take the Hindmost
http://www.amazon.com/Devil-Take-Hindmost-Financial-Speculation/dp/0452281806/ref=pd_sim_b_41
Against the Gods
http://www.amazon.com/Against-Gods-Remarkable-Story-Risk/dp/0471295639/ref=pd_sim_b_1
A Splendid Exchange
http://www.amazon.com/Splendid-Exchange-Trade-Shaped-World/dp/0871139790/ref=sr_1_4?ie=UTF8&s=books&qid=1215291970&sr=1-4

Resources
Vanguard Investing Information - Vanguard is a commonly recommended investing site because of their low expense ratios, and their guides to investing are very useful to get started learning about things
Bankrate.com - lists of rates for CDs, MMAs, savings and checking accounts, and just about everything else
Investopedia - your encyclopedia for all things financial

There are a couple of frequently cited flowcharts from reddit, slightly old but applicable to US residents:
personal finance,

and
financial independence,

I'll be adding to the OP regularly, so if you have some good info or links that I should add, please post in here and let me know. Thanks!

Somebody fucked around with this message at 00:37 on Nov 22, 2022

# ¿ Jan 20, 2010 17:44

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# ¿ Apr 27, 2024 22:03

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

TagUrIt posted:

Is this a reasonable/normal set up?

One more question about the magical 3-12 months expenses: Where do most people keep this money?

Sounds just about right to me. The savings or MM account would hold your 3-12 month expenses, although right now it's not a huge deal to just have it all in your checking account since interest rates are so low.

# ¿ Jan 21, 2010 06:14

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

slap me silly posted:

It depends - for me the extra interest I get from the online savings account is equal to half a year's worth of cell phone bills. But this distribution to checking/money market/online savings is exactly how I set things up too.

Who's your savings account with? I used to use ING, but then their rate went to poo poo and I stopped caring. I guess once you build up your emergency fund it makes a decent difference, at the beginning it's not worth chasing rates. I should start shopping around again, I guess.

# ¿ Jan 21, 2010 06:40

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Picaresque, you're in almost exactly the same spot I was in when I was 20. I suggest starting a Roth and maxing out your $5k contribution for 2009, for a few reasons:

- it's never too early to get started for retirement
- you can take out whatever you put in without penalty if you decide you need to use it for other things (you just can't take out any interest it earns)

Like slapmesilly says, you can invest in anything within the structure of a Roth. For example, your Roth IRA could consist of 80% stocks, 20% bonds. I suggest reading the Long Term Investment megathread for ideas on how to do this; there are options where you can really get active in deciding what kinds of investments to pick, and options that will basically do it all for you. If you want to start now, I'd recommend sticking it all in a Target Retirement fund right now (that's a really passive kind of fund that doesn't require a lot of thinking), and then reading up to decide later what kind of investment strategy you want to pursue and how exactly you want to diversify your investments.

And you can wait until later to decide if you should put any in for this fiscal year. As a student, you don't have many expenses to think of and your parents will likely help you if need be, so your emergency fund is not a huge priority like it would be if you were supporting yourself.

# ¿ Jan 22, 2010 04:43

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Wow, $150 sounds like a pretty good deal. Make sure there aren't any major requirements (some banks require direct deposit for those deals). When you go in to close your account at Wells, bring in the offer and ask them about it. They might match it, or they might bring up some other information/requirements that you should know about. Companies almost always know the loopholes in each other's promotional offers, so that's the best way to find out.

# ¿ Jan 23, 2010 05:04

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Pillowpants posted:

Should you ever close a credit card?

If it's not your first card, if you have other ones, and if the limit is low enough that it doesn't really affect your credit utilization ratio. Or if it gets stolen. Or if you're not planning on buying anything on credit ever again and don't care about your score. Or if you can't stop spending like craaazy. That's about the only times I can think of.

# ¿ Jan 28, 2010 04:21

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Eggplant Wizard posted:

I don't know what a high front end load is

Investopedia is your friend when it comes to terms you've never heard of: http://www.investopedia.com/terms/f/front-endload.asp

# ¿ Feb 4, 2010 19:16

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

There are better ways to raise your credit without having to pay interest. What is making your credit score lower right now? Is it the length of your credit history, a high utilization/credit ratio, what?

# ¿ Feb 26, 2010 22:03

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Engineer Lenk posted:

Secured credit card, convert to unsecured when they let you, and a fair amount of time using it properly (paying in full on time every month, keeping the statement amounts <50% of your credit limit).

This (unless you can get an unsecured card right away, but it's unlikely with no credit at all) - if you're scared of having a credit card because you think you'll overuse it, just put it in the back of a drawer and set one of your bills to automatically use it every month. Netflix or something similar is the easiest way to set this up, this way they won't close your account for inactivity.

# ¿ Feb 26, 2010 23:05

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

I tried to figure out a situation that would make that advice make sense and I couldn't come up with anything that wasn't ridiculously convoluted. I think they might have gotten the idea of credit utilization ratio mixed up, like you HAVE to have a low ratio at all times or your credit score will go down. But no, that's silly, have her set it up to autopay every month and she'll be fine.

If she is having her credit run for something specific (like renting an apartment), it might make sense to make payments sooner than every month just to keep the balance/credit ratio low when they check the credit, but that's only if her available credit is really low compared to what she spends per month.

# ¿ Mar 25, 2010 02:08

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

I can't think of one. Make sure you get it paid off if the rate rises to something ridiculous after the 7 months.

# ¿ Mar 25, 2010 20:05

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Verism posted:

Weed:$300

We both have 401ks that we are not contributing to. Our employer will match our contributions up to 5% of our income if we start. To be honest though it's really hard to think about retirement when you're living paycheck to paycheck.

This is stupid. Now, I like smoking up as much as the next person, but if you can't secure your retirement because of it it has to go. This is a huge huge huge expense that is entirely a luxury, unless there's some sort of medical condition you didn't mention.

# ¿ Mar 26, 2010 01:19

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Verism posted:

The big problem is I'm entirely in charge of our finances and I don't really know what I'm doing. I mean can I keep that 401k if I leave my current employer? Can we buy a house on our current income or do we need better paying jobs first? Will paying off that last credit card help my credit score much or do I need to be doing a lot more?

Consider that every dollar you spend on weed is costing you not just the amount you pay, but also interest (as you could have applied it to your biggest credit card debt).

You can usually roll the 401k over to your new job or to an individual retirement account, and that's free money you're leaving on the ground every time you don't get an employer match. It's like an instant 100% return on the first 5% you contribute. That's fantastic and you're wasting it right now. You won't be able to buy a house anytime in the near future if you can't even save 5% of your income for retirement.

Your goal right now should be to get rid of that debt ASAP and start making contributions to your 401k (5% is not all that much). When that is done, save up an emergency fund and then get started on saving for the house downpayment. Don't worry about buying a house as soon as possible - the market will stay low for some time, and you shouldn't be tying yourself down to a place when you don't know whether you're going to stay with your current employer/go back to school in a different place/etc. And don't even think about your credit scores. If you focus on paying down that debt and then just keeping up responsible payments to everything, your score will go up automatically. Just don't close your first credit card.

If you set a target for yourself, you'll find it much easier to get motivated to save. Like:
- Pay off credit card debt
- Put $100 each month into retirement fund
- Save $4000 for emergencies
- Save $20,000 for a down payment

If you're really gung ho about it, you might even consider getting a second part time job. Not only will it help out with bills, it'll also give you less time to smoke.

# ¿ Mar 26, 2010 15:39

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

mint.com is good to help you start tracking where that money is going to. How much do you have in your emergency fund already? It would be good to get going on paying down that car loan, that's a pretty high interest rate (not for car loans, but compared to your other stuff). I'm assuming "Pick-up" is your car payment? Paying more for a car than for rent sounds a bit crazy. Apart from that, yeah, figure out where you're spending $1k a month and see if you can push more of that over towards paying off your car loan.

# ¿ Mar 30, 2010 05:10

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

What are your long-term goals? Unless you have a reason you absolutely need that truck (and I'm not a car person, so I wouldn't know), it seems silly to have because you're spending so much money to drive it that everything else is going to take a back seat for a long time. If that's what you want, then go right ahead. You make decent money (I'm assuming this is post-tax, if not, I figured out where the extra thousand a month is going!) but it's going to be hard to do anything else with such a financial monkey on your back.

Glad you made it out safe, though. ch3cooh is my favorite carboxylic acid :v:

# ¿ Mar 30, 2010 16:57

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

You could do a 6 month CD but honestly, the rates are so low right now (around 1%) that it probably wouldn't be worth the hassle.

# ¿ Apr 2, 2010 22:43

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Ziir posted:

Are there no other options? Unless of course I can just sit at home and do it all online then well, that's $35 for pressing a button which I'm doing right now typing this, which isn't bad I guess.

Sure, you can do it online, just go to bankrate.com to find the best rates. Although I think you might still have to mail in paperwork to deposit money from your bank to another place. What kind of rate does your own bank offer for CDs? That would probably be easiest to do.

# ¿ Apr 3, 2010 15:07

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

lwoodio posted:

Can anyone give some advice?

I thought I already had, but it was another thread, sorry! There aren't very many good savings options right now since interest rates are so low. I saved my down payment in a money market account, but rates for those are next to nothing right now and so is everything else. A high interest savings account would also work, or a CD if you know for sure you won't be touching it for a certain period of time. You can check out bankrate to compare, but rates are low across the board right now.

# ¿ Apr 9, 2010 21:03

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Rule of thumb is 1/3 of income should go towards housing. This will be proportionally larger if you live in a place like NYC, smaller if you live in Nebraska.

# ¿ Apr 13, 2010 18:17

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

The legitimate online moneymaking thread might help you. Tutoring is great since hours are always evenings and weekends.

Stop eating out so much - make an "entertainment" category and eating out/resturants should go under that. That's $400 you're blowing every month on luxuries - you can pay off your CC in half a year if you cut all that out. Realistically you can just cut it down a lot and pay off your debt within a year.

# ¿ Apr 14, 2010 02:05

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Pillowpants has an awesome budgeting thread in SA Mart, I hear it's really great if you need some sort of budget thing made up for you. In fact, I should probably add that to the OP.

As for documentation, lots of people here use Mint to keep track of spending since it does stuff automatically. Set it up and see how much you spend on ridiculous poo poo you don't need to buy. And for saving, you need some concrete goals or you'll just end up buying lots of things instead of the big things you really want (a house, nice car, jetcopter, whatever). Also you probably should get started on retirement savings soon, so check out the long term investment thread.

# ¿ Apr 29, 2010 17:01

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Added it to the OP; agreed, it's very useful.

# ¿ May 17, 2010 16:50

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

sublyme posted:

edit - got a reply in the stock thread telling me that diversifying $400 is a joke and to just throw it into an index fund instead, whoops, ETrade confused me into thinking I should diversify...

You'll be partially diversified already by putting it into an index fund; you won't have any international exposure but with $400 who cares. If diversifying is something you want to do later, figure out the allocation you want to end up with and invest your other money accordingly.

# ¿ May 18, 2010 01:42

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

polyfractal posted:

-I have two credit cards/bank accounts. My first card, which I got in high-school and predominantly use, and my second card, which I got at my college bank and literally never use. My first card has a great history and a high limit. My second card has basically zero history and like a $500 limit because it is a "student" card. Should I close out the second card? Or just let it keep sitting there doing nothing?

If it were me, I'd close the old card, put something small and automatic on the first card, and get a new rewards card to use with everything else. I'd apply for the new card first before closing your old one, just in case they reject you or whatever.

quote:

-I use my credit card like a debit card. I always pay off the entire balance each month and never have a carry-over debt. Is this bad?

No this is awesome, and it's why you should be looking at a rewards card (better rewards are offset by higher rates, but you won't have to worry about that because you never carry debt). Don't listen to anyone who tells you it's good for your credit to carry over debt month to month, they are wrong.

quote:

-Are there any good spreadsheets to use for budgeting? Use Quicken? I'm considering Mint as well

I use Mint and have never had issues with it, but I don't do much with my budget. There is a budgeting thread linked in the OP and so is Pillowpants' SA Mart thread where he will make a kicking budget for you for dirt cheap.

Dead Pressed, congratulations on beginning to build your credit. Do it wisely, pay your card off in full every month, and freeze that fucker in a cup of water if you ever catch yourself misusing it. Don't be nervous, just don't spend more than you make.

# ¿ Jun 3, 2010 03:13

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

polyfractal posted:

Thanks for the advice. Out of curiosity, I always heard to never cancel your first card because it has so much history/credit already on it. My first card has a $10k limit, 13% interest and some rewards (dunno how they compare to others - I'll be cashing in about 10k points soon for $100 cashback I think). Still go ahead and close it?

No, I meant close the other one (the second card), put something automatic on the first one to keep it around forever, and pick a new rewards card. Your question was "Should I close out the second card" and I was just differentiating between that one and the new one you would get by calling it "old". Sorry, I was a bit unclear.

# ¿ Jun 5, 2010 02:49

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Vanguard is a popular recommendation around here because of its low expense ratios. You should decide yourself whether you want to manage the allocation passively or actively - if you don't know much about investing, it's okay to just stick everything into a Target Retirement fund for now (a lot of the bigger investing companies will have these as an option). As you become more knowledgeable about what kinds of things you want to invest in, you can move your money to different funds to create your own allocation.

Your personal desired allocation will depend on things like how old you are, when you plan to retire, whether you are very risk-tolerant or not, things like that.

# ¿ Jun 6, 2010 00:22

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Qaz Kwaz posted:

Good points. Don't forget he's paying $4k+ in interest on top of that.

That's already taken into consideration with the interest rate. Lenk is right here - unless you are really emotionally stricken by paying off debt slowly, it's the optimal thing to do. Apart from that, prioritizing retirement savings doesn't mean he has to wait forever to pay off the student loans, just that he doesn't do that in lieu of his Roth. If he has extra money after funding his retirement account, he can always throw that at the loans if he wants to make more than the mininmum payment.

# ¿ Jun 7, 2010 20:04

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

There are two major factors to consider when deciding whether to cancel a credit card:
- length of your credit history with the card compared to your total credit history
- amount of credit on the card compared with how much total credit you have

Both credit history and credit amount are generally positive for your credit score, so if cancelling will hurt either one significantly, don't do it. If you have open cards with longer histories, and your total credit line is big compared to the card, then it really doesn't matter if you cancel it.

As an example: Susan gets a $500 limit Home Depot credit card for a discount promotion. She already has $30k of credit on other cards which she's had for much longer. She can cancel the Home Depot card without having to worry about anything more than a minor blip on her credit report.

# ¿ Jun 9, 2010 03:08

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Engineer Lenk posted:

Do it in the other order. Keep the high line for the best credit score until you have the $5k card in hand, then cancel it if you know it'll be too much of a temptation.

Agreed. It's really really easy to spend money on a house so be careful, but don't cancel your only big line of credit without another line open as a backup for emergencies. And you've already got the mortgage - who really cares about knocking your credit score down temporarily?

# ¿ Jun 9, 2010 16:59

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Groceries and things should only run you a 2-3 hundred dollars for one person. Your car and parking are the most expensive things you've got (and you didn't take into account any sort of maintenance on the car), and if you're living in a college town where you can use public transportation I'd ditch the car in a heartbeat. Obviously this wouldn't work if you have to drive all over the place on a regular basis, so this depends on your situation.

After knocking out that credit card debt, you should get your savings up a bit more (if you have a safety net of being able to live with your parents it really doesn't have to be too much). You also don't have any category for entertainment - are you never going to go out for drinks with friends, see movies, etc? This can add up quickly especially as a college student.

# ¿ Jun 13, 2010 17:07

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

$1250 for one person? Where are you living? Any chance of getting roommates to lower that at all?

The glaring omission I see is that you're not saving specifically for retirement. It's easy to put money into your savings account and then blow it all on things like vacations, unexpected health issues, etc. As you build up your emergency fund (what do you have right now?) it would be good to consider starting to either contribute to your company's 401k if you have one, or starting a Roth for yourself if they don't.

# ¿ Jun 13, 2010 19:24

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Nah, they use different algorithms and nobody knows exactly what the true algorithm is anyway so a big difference isn't particularly surprising. If you're that worried then just pull your actual reports from annualcreditreport.com to check.

# ¿ Jun 17, 2010 04:20

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Have you checked out your credit report to see if there is anything on there that might still be hurting you (it might just take some time for the poo poo you did to fall off your report)? Apart from that, a secured credit card is usually easy to get from your bank, and will help you to reestablish credit.

# ¿ Jul 17, 2010 12:33

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Why do you care about your credit score? Are you planning on buying a car or house in the next year that would require a great credit score? If the answer is no, then don't make decisions about whether or not to apply for cards based on a short term credit hit. Apply again, the worst they can say is no. I like my Aamzon rewards card.

moana fucked around with this message at 15:34 on Jul 24, 2010

# ¿ Jul 24, 2010 15:30

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

It's kind of up in the air since companies have really tightened credit restrictions in the past couple of years. If you don't qualify for a rewards card, just get s normal credit card, keep asking for credit limit increases every 6 months or so, and soon your score will be high enough to get a rewards card.

# ¿ Jul 24, 2010 23:17

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Sophia:
1. You're doing a good job already with savings. If you go into the Long term investing thread I'm sure there will be more advice for you, but you really need to figure out when you need the money by to have a decent idea of what to do with it. If you do want to buy a place in the next 5-10 years, putting it so heavily weighted into the stock market is pretty risky. I'm actually running into the same "problem" right now - after maxing out my Roth, where do I put the rest? Right now I have most of my savings in a Vanguard money market account from back when I was saving for a house but I am considering moving it into TIPS or municipal bonds or a mix of the two since I won't be needing it for a while. It's your choice, but putting your cash in 75% equities is very high risk if you might need to take it out in 5 years.

I wouldn't do any trading in individual stocks, but that's because I don't have the time or inclination to do a lot of research. If that's your thing, go right ahead.

2. What is your current credit score? I wouldn't worry about it unless your score was low AND one of the reasons they give for the low score is available credit.

# ¿ Aug 9, 2010 15:48

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Sophia posted:

As far as the credit score, when I last checked in June it was 780 so it's not really low, it just sort of irritates me that they won't increase my limits considering I've never missed a payment and do make a decent wage. I'll keep thinking about applying for another one.

Yeah, this is a great score, and even if you don't do anything but make your payments on time, it'll probably be over 800 by the time you're ready to buy a house. I actually don't think that it even matters at this point - you'll probably be getting the best rates on anything with that score already, and there's no need to increase your score unless you want to brag to people (and that's just silly). You're doing fine!

# ¿ Aug 9, 2010 18:35

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Um, isn't the calculator you just linked able to tell you that? Just put in the date of maturity instead of today's date. Or am I missing something?

# ¿ Aug 10, 2010 19:52

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Brennanite posted:

Speaking of credit scores, I don't know mine.

You can go to annualcreditreport.com and order your credit history from each of the three companies for free once per year. This will tell you what's on your history and if there's anything shady. For your FICO score (the credit score most people talk about) you'll have to pay extra, or you can use one of the free estimators out there like quizzle.

A hard credit inquiry (I think this is what a real FICO score report will require) usually depresses your score in the short-term, since they take points off for applying for a bunch of cards or loans or whatever, but it's not going to have any lasting impact on your credit. Unless you're buying a house in the next 3 months or something, it won't matter AT ALL.

# ¿ Aug 10, 2010 19:58

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# ¿ Apr 27, 2024 22:03

moana: Jun 18, 2005; one of the more intellectual satire communities on the web

Cool, well in that case there is no reason at all for the husband to be worried.

# ¿ Aug 10, 2010 20:26

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > BFC Newbies Thread: 33% of the interest paid is tax delectable

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